Mish, I always said that I do not trust Chinese financial data on any level, they are not using the same accounting procedures (certainly not FASB and even that venerable institution of truth and trust is as corrupt as any other now since mark to make believe has been allowed ever since the GFC) so I take this and any other economic/financial reports and graphs with a grain of salt. Our reporting system is extremely dependent upon periodicity and we are just too close to the sudden cardiac arrest in the economy called Covid to make any useful judgements yet. But, beside that I just no longer trust our reporting any more than the Chinese because of their treatment of inflation and prices. As a retiree on a fixed income I know damned good and well what prices are, I track them closely, yet year in and decade out they under report prices to the point where the emperor has not a stitch on.
I also want to know why my own credit score has dropped 25 points in three months, and most of that since I closed on my house in early April. I just made payment number one, 359 to go, with no forbearance and no late fees, no massive precarious new debt, home ownership used to bump your score up into the realm of serious adult who minds his credit, but that appears to have changed without explanation. I am not laid off, and cannot be in future, my income can't drop in nominal terms.
I think the supercomputer AI's have decided that house prices are going to seriously drop over the next couple years and that is being reflected in credit scoring to limit lender exposure to debt the consumer can't service once things really go organically south after the Covid trigger was pulled, the way sub prime triggered but was not the cause of the GFC. Call it a preemptive downgrade of all credit scores reflecting the wisdom of AI that we all will be less worthy to borrow soon. The one good thing is that it will not impair my ability to do an IRRRL to lower the interest rate on my mortgage come December.
Here by the way is a chart of incomes and how Covid has affected government share of that income, courtesy of the Daily Shot Editor:
Please note that wages (earned income) now make up well under half of all income. Also note that earlier in the week we were treated to a Fed report (or was it BLS?) that claimed a more than 10% jump in incomes. So which is it? There is conflicting data everywhere now so no reason to trust any of it.
And at the current rate any day now the government transfer will equal wages as a source of income. Yet even at that people are struggling at best and massively failing at worst. This puts us on a precipice that we all knew was coming, how it resolves is not really a question anymore since we know TPTB are simply not going to change the current Fed and Federal transfers to Wall Street and the 1%. Yes, they may transfer more to the lower 90%, but our SHARE of transfers will still drop in relation to the wealthy and income inequality will continue to get worse. So much so that the rioting will one day stop being about racial inequality and start being about income inequality, and if you ask me that is already what is at the heart of the troubles, because race is a huge indicator of earning power. In fact the poorer you are the more the police are going to try to contain your anger, and that is why race "APPEARS" to be at the heart of police brutality. Soon enough it will be recognized that it is not really about race but about economic disadvantage and we will 90% of us be in that same foundering desperate boat. Yet they still will not change anything fundmentally, the wealthy own the government and are going to act to protect their portfolio even if it means a world war where we are all just cannon fodder. That has been the go to solution in the past, though who knows, it was just demonstrated that biowarfare (Covid) is like the neutron bomb, kills population while leaving the assets in tact. Now they just need a far more deadly pandemic.